HITECH Stimulus for Physicians
Samuel S. Spicer, MD
I
n response to the economic circumstances occurring in
late 2008, on February 17, 2009 President Barack Obama
signed in to law the American Recovery and Reinvestment
Act of 2009 (ARRA). This act, often referred to as “The
Stimulus Act,” appropriated federal expenditures to a variety
of projects throughout the economy, with a large portion of the
funding being allocated toward infrastructure development
(such as road construction). A portion of the funding
appropriated under the Act provides
health care information technology
(HIT) incentives and expands privacy
legislation. Title XIII (Section 13001) of
that legislation is termed the Health
Information Technology for Economic
and Clinical Health Act (HITECH) and
funds $17.2 billion for incentives and
$2 billion for grants.
HITECH may be more of a lesson in
delayed gratification than a stimulus
bill. Incentive payments to physicians
participating in Medicare do not start
until January of 2011 for meaningful use
of certified information systems. Table 1
(page 355) lists the Medicare Part B
maximum yearly payments. In 2015, the
law directs 1% reductions in the
Medicare fee schedule followed by an additional 1% reduction
in each of the next two years—2016 and 2017—for physicians
who have not satisfied the requirements to qualify.
When announcing the HITECH legislation, President
Obama promoted an electronic health record (EHR) for all US
citizens by 2014. The rationale behind having an EHR is the
expectation that it will improve the quality of health care and
population health while simultaneously delivering care more
efficiently. EHRs have been able to deliver some operational
efficiencies inside an integrated delivery network such as
Kaiser Permanente1 but the effect of widespread adoption is
unknown.
A simplified but useful formula for incentive payment
requirements is $ = EMR + HIE + QR. An EMR is an electronic
medical record that includes electronic prescribing, HIE is a
health information exchange which shares medical records,
and QR is quality reporting. Most physicians are familiar with
the concept of an office EMR and the reporting of National
Quality Forum metrics through the Centers for Medicare and
Medicaid Services Physician Quality Reporting Initiative.
The key to payment depends upon the final definitions of
meaningful use and certified.a These definitions will be issued
by the Secretary of the Department of Health and Human
The North Carolina Medical
Board lists over 16,000 licensed
physicians practicing in North
Carolina. If 50% of these qualify
for HITECH funds, it could
contribute over $352 million to
the state's economy.
Services by December 31, 2009. The definitions will be based
upon a recommendation by Dr. David Blumenthal, a Harvard
physician and professor, who now serves as the national
coordinator for the Centers for Medicare and Medicaid
Service’s Office of the National Coordinator (ONC) for Health
Information Technology. The Congressional Office of Budget
and Management has estimated that there will be $23 billion
in payouts for incentives from Medicare and $21 billion from
Medicaid funds between 2009 and 2019.2
Medicaid Providers
Under the HITECH Act, physicians will have a choice of
receiving incentive funding through either Medicare Part B or
Medicaid, but not both. Medicaid EMR incentives, which will
a The latest definitions for meaningful use and certified can be found at: http://healthit.hhs.gov/portal/server.pt?open=512&objID=1325&
parentname=CommunityPage&parentid=15&mode=2&in_hi_userid=11113&cached=true.
Samuel S. Spicer, MD, is the president of the North Carolina Healthcare Information and Communications Alliance. He can be reached
at sam.spicer (at) nhrmc.org.
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NC Med J July/August 2009, Volume 70, Number 4
Table 1.
Medicare Part B Maximum Yearly Payments
Potential Medicare Payment Amount, by Year
Year of Adoption
2011
2011
2012
2013
2014
2015
2016
Total
$18,000
$12,000
$8,000
$4,000
$2,000
$0
$44,000
$18,000
$12,000
$8,000
$4,000
$2,000
$44,000
$15,000
$12,000
$8,000
$4,000
$39,000
$12,000
$8,000
$4,000
$24,000
1%
reduction
1%
reduction
Variable
2%
reduction
Variable
2012
2013
2014
2015
2016
Table notes: There is a 10% additional payment each year for health services shortage areas. Maximum amount possible is 75% of
allowed charges each year. 1% and 2% reduction refers to a reduction in Medicare fee schedule.
be administered by the state, will provide payments to a range
of practitioners for their meaningful use of EHRs (see Table 2).
These incentives can be directed to safety net providers such
as federally qualified health centers and rural health clinics, as
well as practitioners including nurse practitioners, certified
nurse midwives, and dentists. To qualify, providers need at
least 30% of their practice to consist of medically underserved
patients. Pediatricians need only 20% and will receive two-thirds
of the same payment. During the first year, physicians may
receive funding to be applied to EMR purchase, installation,
and training. Payment is for reimbursement of expenditures,
and there are no penalties such as those included in the
Medicare program.
Economic Impact in North Carolina
The North Carolina Medical Board lists over 16,000
licensed physicians practicing in North Carolina. If 50% of
these qualify for HITECH funds, it could contribute over $352
million to the state’s economy. However, there is a large gap in
the number of EMRs that might qualify for incentive payments.
In 2008 it was estimated that nationally 38% of physicians
have a basic EMR system of some kind and 4% have a complete
EMR system with features such as office notes, order entry, and
decision support.3 If the definitions of certified and meaningful
use incorporate very basic installations, then nearly 2,000
physicians would need to install and use a new qualifying EMR
by the end of calendar year 2010 to qualify for the incentive. A
more strict definition could lead to 7,000 physicians needing
to upgrade their systems. It usually takes six months or more
to plan, purchase, and successfully install an office EMR.
Privacy and Security Provisions
Privacy and security issues have had major revisions. A
collaboration among 44 states and territories, including
North Carolina, have developed tools for compliance including
a Provider Education Toolkit that provides education regarding
privacy and security for physicians in an electronic world. Both
the North Carolina Medical Society and the North Carolina
Academy of Family Physicians have referenced free CME at
the Secure4Health website (http://www.secure4health.org).
Table 2.
HITECH Act: Medicaid Physician Reimbursement Plan
Potential Medicaid Payment Amount, by Year
2011
2012
2013
2014
2015
Year of Adoption
2011 $25,000 $10,000 $10,000 $10,000 $10,000
2012
$0
2013
$0
$0
2014
$0
$0
$0
2015
$0
$0
$0
$0
2016
$0
$0
$0
$0
$0
2017
$0
$0
$0
$0
$0
2016
2017
2018
2019
2020
Total
$0
$0
$0
$0
$0
$65,000
$0
$0
$0
$0
$65,000
$0
$0
$0
$65,000
$0
$0
$65,000
$0
$65,000
$25,000 $10,000 $10,000 $10,000 $10,000
$25,000 $10,000 $10,000 $10,000 $10,000
$25,000 $10,000 $10,000 $10,000 $10,000
$25,000 $10,000 $10,000 $10,000 $10,000
$25,000 $10,000 $10,000 $10,000 $10,000 $65,000
$0
$0
$0
$0
$0
NC Med J July/August 2009, Volume 70, Number 4
$0
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Medical education credits may be available and are part of
the offering.
Health Information Exchange: The Weak Link
Currently there are approximately 193 HIEs with only 57
actively transferring data in the United States.4 The western
North Carolina exchange, called Data-Link, began transferring
records in 2006 as a collaboration among 16 western North
Carolina hospitals. It is now enrolling physician offices.5
University Health Systems of Eastern Carolina, Duke
University Health System, and the University of North
Carolina Health Care System are all in various stages of
exchange within their own integrated delivery networks. For
the vast majority of health care in North Carolina the
exchange of information is limited to the use of a fax machine,
patients physically carrying medical records, a CD, or hand
delivery of paper.
The financial value of an EMR has been proven to be
somewhat successful because of its ability to assist with
coding and billing efforts. Quality reporting is emerging as
financially rewarding to health care practitioners with programs
like Bridges to Excellence, various health plans’ centers of
excellence, and the CMS Physician Quality Reporting Initiative
rewarding practices for reporting quality measures and/or
achieving certain quality benchmarks.
Health information exchanges, however, are struggling to
find a financial model. Nationally, 82% of exchanges cite
the sustainable business model as a difficult challenge to
implement.6 To be successful, an HIE must have the support
of the collaborators who can harvest the efficiencies such as
major health plans (e.g., Medicaid, Medicare, Blue Cross and
Blue Shield, military health system, and the Veterans Health
Administration), lab companies, and radiology practices. In
addition, HIE face difficulty with access to capital, funding
misalignment, lack of uniform policies, and data sharing
agreements. Recognizing these difficulties has prompted
North Carolina to develop a strategic plan for HIT.
North Carolina Health Information Technology
Strategic Planning Task Force
To ensure that North Carolina is in a position to capture as
much of the stimulus funding as possible, in April 2009
Governor Beverly Perdue appointed a North Carolina HIT
Strategic Planning Task Force. Members represent consumer
organizations, public health agencies, physicians, hospitals,
mental health providers, and other health care representatives.
The Task Force’s report was released June 24, 2009 with
recommendations on a strategic approach for EMR, HIE,
quality reporting, and health care broadband access.b On July
17th Governor Perdue charged the North Carolina Health
and Wellness Trust Fund with leading North Carolina health
b
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IT efforts. A Health IT Collaborative will operate under the
direction of the Trust Fund to obtain stimulus grant funds
for EMR adoption, HIE operations, quality reporting, and
broadband access.
HITECH grant funding on a state level can be for planning
or implementation efforts. Given the significant amount of
groundwork that has been done by the North Carolina
Healthcare Information and Communications Alliance
(NCHICA), North Carolina Area Health Education Centers,
the North Carolina Healthcare Quality Alliance, and other
groups, North Carolina should be able to compete for
implementation grants this fall as soon as criteria have been
finalized by the ONC.
Difficult Issues in HIT Implementation
Several related issues will have a significant impact on the
ability to implement the North Carolina HIT Strategic Plan
Task Force report:
1) Role of personal health records and the patient-physician
relationship. Patient participation and compliance can be
the difference between illness and wellness. Shared
decision-making and patient self-management of chronic
conditions are key parts of improving health. Personal
health records can add safety and reliability to providers’
medical record systems. Mutual trust is the foundation of
a healthy physician-patient relationship. Physicians and
consumers need to be engaged in how personal health
records are incorporated into their EMR.
2) Design of EMR to assist physician workflow. Payment
reform is an opportunity to reorient care and
subsequently EMR design around electronic abstraction of
quality metrics.7 Incentives must be properly aligned so
that the EMRs are used to improve quality of care and
patient health, not simply used to improve coding. If we are
to reward quality, providers need tools that make it easy to
deliver the best possible care with quality built into the
system.
3) Improving our efficiency. Cost savings are dependent
upon decreasing unnecessary testing, appropriate use of
guidelines, coordination of care, better preventive care,
and workflow efficiencies. Community Care of North
Carolina (CCNC) is a proven mechanism for cost savings
in the Medicaid population.8 Given current state budget
constraints, priority should be given to enhancing
CCNC’s medical home functions with health information
technology. Electronic prescribing alone provided
Mississippi with $1.2 million in cost savings per month in
Medicaid prescriptions.9 Because of the efforts of CCNC
and BCBS, North Carolina is the 6th highest e-prescribing
See http://www.ncrecovery.gov for more details.
NC Med J July/August 2009, Volume 70, Number 4
state with currently 15% of prescriptions transmitted
electronically. Accurate measurement of the savings will also
be needed to help sustain the underwriting of HIEs.
4) Coordinated statewide effort. As outlined in the HIT Task
Force report, North Carolina has immense intellectual
capital, strong public health programs, proactive provider
organizations, excellent teaching institutions, and
organizations such as CCNC, the Area Health Education
Centers, The Carolinas Center for Medical Excellence,
MCNC, eNC, the North Carolina Institute of Medicine, and
NCHICA. All of these groups need to work in concert
through the North Carolina HIT Collaborative in order to
be successful in grant funding and underwriting endeavors.
The continued leadership of Governor Perdue and the North
Carolina General Assembly can oversee the coordination
of efforts among stakeholders and ensure the success of
North Carolina’s efforts.
5) In the office assistance. Even with the incentives for adoption,
most EMR implementations are time and resource intensive
endeavors that still lose money. Using the New York model
of exchange development10 to assist providers by having
on the ground and in the office expertise will dramatically
increase the probability of success. North Carolina should
use the existing organizations such as AHEC, CCME, and
NCHICA to put resources on the ground and tip the balance
in favor of adoption.
The HITECH Act brings significant interest in the adoption
of electronic medical records, the establishment of health
information exchanges, and the enhancement of quality
reporting. Providers may be eligible for $44,000 to $65,000
in incentives. Successful application of electronic medical
records for meaningful use will depend upon a prompt and
effective implementation of new health information
exchanges. A coordinated statewide effort has started with
Governor Perdue’s appointment of the North Carolina HIT
Collaborative. Timely implementation of the HIT strategic
plan will allow North Carolina to be competitive for additional
grant funding. The result will be better health for North
Carolinians. NCMJ
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